Economics 2025 Jamb Examination

Cost-push inflation occurs when the general price levels rise due to increases in the cost of wages and raw materials. When the costs of production factors—such as labour, land, or capital—increase, the total supply of goods and services decreases because production becomes less profitable. This shift in supply forces producers to raise prices to maintain their profit margins, passing the costs on to consumers. It is distinct from demand-pull inflation, which is caused by an increase in consumer demand rather than a rise in production expenses.

In economics, 'money' must possess the fundamental characteristic of general acceptability. While cheques are a convenient means of transferring money, they are not money themselves because a creditor or seller is not legally bound to accept a cheque in settlement of a debt. The acceptance of a cheque depends on the trust between the parties and the confidence that the drawer has sufficient funds in the bank. Because they can be refused as a medium of exchange, they are classified as near-money or credit instruments rather than legal tender.

Economic development is typically marked by a structural shift of the labour force from the primary sector to the secondary and tertiary sectors. In poorer or developing countries, the economy is often dominated by subsistence agriculture, where a large majority of the population works the land to meet basic food needs. As a country grows wealthier, it adopts technology that allows fewer people to produce more food, freeing up labour for manufacturing and services. Therefore, a high concentration of labour in agriculture is a common indicator of a lower level of industrialisation and overall economic wealth.

A rightward shift of the demand curve indicates an increase in demand at every price level, which is caused by factors other than the price of the good itself. An increase in consumers' income is a primary factor; as people earn more, they have higher purchasing power to buy more cocoa. Options B and C relate to movements along the curve rather than shifts of the curve. Option D would affect the supply curve rather than the demand curve. Therefore, higher income levels effectively boost the overall market demand for cocoa products.

Commercial policy refers to the regulations and measures a country uses to control its international trade, such as tariffs and quotas. One of the strongest arguments for such policies is the 'infant industry' argument, which suggests that protecting local industries from foreign competition helps them grow. By restricting imports, a country encourages domestic production, which in turn creates more jobs and reduces domestic unemployment. This protective stance helps stabilize the local economy and prevents the 'dumping' of foreign goods that might put local manufacturers out of business.

The stock exchange is a highly organized secondary market where existing financial securities, such as shares, stocks, and bonds, are bought and sold. It provides a platform for companies to raise long-term capital and for investors to trade their holdings. This facility ensures liquidity in the financial system, as investors can easily convert their securities into cash. While it is a marketplace, it does not deal with physical commodities like agricultural products, but rather with the legal titles of ownership and debt in corporate and government entities.

The location of an industry is generally determined by geographical and economic factors that reduce production and distribution costs, such as being near raw materials to save on transport, near markets to reach customers easily, or where labour is plentiful. While the 'minimum wage rate' is a statutory labour cost set by the government, it usually applies uniformly across a country or region and is not a primary factor that makes one specific location more attractive than another for setting up a factory. Instead, firms look at the 'availability' and 'skill level' of the labour force in that specific area.

OPEC stands for the Organization of the Petroleum Exporting Countries. It is a permanent intergovernmental organization created at the Baghdad Conference in 1960. Its primary mission is to coordinate and unify the petroleum policies of its member countries to ensure the stabilization of oil markets. By managing the supply of oil, OPEC aims to secure an efficient, economic, and regular supply of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry.

Small firms play a vital role in an economy because they can fill niche markets and provide highly personalized services that large corporations often find unprofitable or difficult to manage. Their smaller scale allows them to be more flexible and responsive to the specific needs of individual customers. Beyond service, they are major drivers of innovation and employment, acting as the foundation for larger industrial growth. Rendering personalized service is a distinct advantage that keeps them competitive and essential to the retail and service landscapes.

Thomas Malthus proposed that population grows geometrically while food supply grows arithmetically. He identified two types of checks to population growth: 'Positive' checks (which increase the death rate, like famine, war, and disease) and 'Preventative' checks (which reduce the birth rate). Malthus argued that to avoid the misery of positive checks, society should adopt preventative checks, most notably 'moral restraint'. This involves individuals delaying marriage and practicing celibacy until they are financially capable of supporting a family, thereby voluntarily slowing down population growth.